The federal government cannot fund new coal-fired power plants without parliamentary approach, according to new legal advice.
The Australia Institute obtained the advice that indicates the plan to underwrite new forms of power including coal, could not be enacted unless there is supporting legislation.
Amendments put forward by the Greens that prevented public money being used to underwrite coal forced the Coalition to pull its 'big stick' energy legislation last week.
The Coalition's 'big stick' divestiture policy is designed to crack down on energy providers convicted of misusing their market power and, in extreme cases, force the removal of assets in order to drive prices down.